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Vikas Acharya

Stealth • 2d

The numerous reasons of why startup founders are stepping down. Many Indian startup founders are stepping down due to issues like co-founder disagreements, loss of passion, and market pressures. High-profile exits, such as those from Dunzo and PharmEasy, highlight funding shortages and operational struggles. The current funding slowdown has intensified these challenges, forcing startups to cut costs and focus on profitability, leading founders to reconsider their roles. A growing number of Indian startup founders are stepping down from their companies, driven by personal and professional challenges. These reasons range from disagreements with co-founders, loss of passion for the original vision, time constraints, and increasing market pressures. Amid the ongoing funding slowdown and rising competition, these exits reflect the difficulties and opportunities within the changing startup ecosystem. High-profile departures, like those of Dunzo and PharmEasy founders, have highlighted the tough times many startups face due to funding shortages and operational struggles. Last year, Unacademy co-founder Hemesh Singh and Upgrad co-founder Mayank Kumar also left their roles in their respective companies. "One of the biggest reasons why we have seen founders in the Indian startup ecosystem splitting up is because the company has some shift in its path and has subverted its vision," TOI quoted Siddharth Pai, founding partner at 3one4 Capital, as saying. Market experts say these departures are part of the startup ecosystem's natural evolution. Founders today are more willing to accept when their ventures are no longer viable or aligned with their goals. Unlike the earlier startup boom, when perseverance was seen as a virtue, today’s founders are more focused on personal well-being and career reinvention. The so-called "funding winter," marked by a slowdown in venture capital investment, has added to the challenges. After years of rapid scaling fueled by easy access to capital, many founders are now facing tight funding pipelines and increased investor scrutiny, as per the TOI report. "The market was very buoyant in 2020-21. Startups raised a lot of capital and growth projections were very robust and investors wanted delivery on these, but it was extremely difficult given the macro-economic changes... there were huge tailwinds for edtech," Madhur Nevatia, partner at Longhouse Consulting, told TOI. In 2023, venture funding in India dropped significantly, with startups raising just $8 billion, a six-year low. This slowdown has forced many startups to focus on cutting costs, improving operational efficiency, and finding ways to be profitable. For some founders, the inability to secure new funding or meet shifting investor expectations led to their exits. The funding crunch also exposed deeper issues within some startups, like unsustainable business models or inflated valuations. In these cases, founders often face tough decisions between adjusting their strategies and meeting investor demands, leading to burnout or disagreements about the company's future direction. "Sometimes it is also that the stage of the company is such that it no longer meets your skillset in the larger scheme of things. With the entire structure entirely changing, one may no longer be relevant," Nevatia added. While some exits are planned, bringing in new leadership for fresh perspectives, others arise from tensions within the leadership teams or external pressures. For example, Ola co-founder Ankit Bhati left in 2018, a year before Ola Electric was founded, shifting the company's focus. Zomato also saw multiple leadership changes between 2018 and 2023, with co-founder Akriti Chopra resigning last year, joining others like Pankaj Chaddah, Mohit Gupta, and Gunjan Patidar.

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